Fri, Feb 14, 2003
The Remedy: Open Strategic Petroleum Reserve and Repeal Jet
Fuel Tax
Why have a 'Strategic Petroleum Reserve,' if we're
never going to use it? The nation's airlines have called upon the
government to tap the Strategic Petroleum Reserve (SPR) to moderate
the adverse impact that alarmingly high fuel costs are having on
the nation's economy. Stressing that high fuel prices are combining
with escalating security and insurance costs to undermine the
airline industry’s massive cost-cutting self-help efforts,
Air Transport Association (ATA) President and CEO James C. May
testified Thursday before the Senate Energy and Natural Resources
Committee that, "Fuel prices are beyond our ability to battle
alone."
May noted
that in the past 12 months, spot fuel prices have increased in
excess of 100 percent, from 57 cents per gallon in February 2002 to
over $1.20 per gallon in February 2003 —- an increase not
seen since the Persian Gulf War buildup in the fall of 1990. "Every
penny increase in the price of jet fuel costs the airline industry
[airline passengers and shareholders] $180 million a year," May
emphasized.
To alleviate the crisis, and boost the U.S. economy, May urged
Congress to take two vital actions:
- press for the release of at least one million barrels of oil
per day from the SPR and
- repeal the 4.3 cents per gallon jet fuel deficit-reduction tax
adopted in 1993 that adds $600 million annually to the
airlines’ fuel cost burden.
May concluded, "In the past, the use of the SPR has sometimes
come too late to help the economy. This time, we hope the
administration will act quickly."
The Air Transport Association of America, Inc. is the trade
association for leading U.S. airlines. ATA members transport over
95 percent of all the passenger and cargo traffic in the United
States.
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